URA Awards Boon Lay Site To Frasers Centrepoint

Source : The Business Times, December 18, 2007

THE Urban Redevelopment Authority (URA) yesterday awarded a residential site at Boon Lay to Frasers Centrepoint, which put in the higher bid of $205.6 million - or $248 per sq ft per plot ratio (psf ppr) - after the tender closed last week with just two bids.

The weak response to the 99-year leasehold site caught industry watchers by surprise as mass market homes are expected to see good demand next year. Property analysts say that prices of mass market private homes could climb by about 15 per cent next year.

The site, which is bounded by Boon Lay Way and Lakeside Drive, had attracted only two bids - Frasers Centrepoint’s $205.6 million ($248 psf ppr) and GuocoLand’s $191 million ($230 psf ppr).

Both bids are below earlier market expectations of about $300 to $375 psf ppr, which were indicated in October when the tender for the site was first launched.

Despite this, market watchers predicted that URA will award the site as the government is committed to its aim of increasing housing supply.

The site, which has a gross floor area of 828,600 sq ft, is just five minutes from Lakeside MRT station.

Frasers Centrepoint plans to build an 18-storey development comprising three blocks, with a total of 600-plus apartments based on an average size of 1,300 sq ft each.

When the tender closed last week, a spokeswoman for Frasers Centrepoint described the group’s bid price as ‘conservative’. She said that the price reflects a breakeven cost of about $550 psf. ‘We would be looking at an average selling price of at least $700 psf,’ she added.